Recent data published by the Debt Management Office (DMO) has shown that in the first quarter of 2024, the total external debt stood at ₦56.02 trillion while the total domestic debt was ₦65.65 trillion.

According to the DMO data, there was an 11% rise in the domestic debt component of total debt stock from ₦59.12 trillion in December 2023 to ₦65.65 trillion in March 2024.

This increase in domestic debts have been linked to increased borrowing to part-finance the 2024 budget deficit and securitisation of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.

The data further revealed that the five most indebted states in Nigeria owed a total of ₦1.88 trillion in domestic debt as of March this year.

The DMO data showed that as of March 2024, Lagos State recorded the highest domestic debt of ₦929.41 billion. A significant drop from the ₦1.0487 trillion recorded in December 2023.

Delta State’s domestic debt stock of ₦334.9 billion as of March 2024 placed it in second position. The state’s domestic debt stood at ₦373.4 billion in December 2023.

Rivers State came in third position with a domestic debt of ₦232.58 million as of March 2024. The state’s domestic debt remained the same with figures recorded in December 2023.

Ogun State came in fourth position with a domestic debt stock of ₦221.21 billion by March 2024. As of December 2023, Ogun State was third on this list with a debt stock of ₦278.6 billion.

Imo State’s domestic debt stock stood at ₦163.11 billion in March 2024. The state’s domestic debt as of December 2023, was ₦217.1 billion.

States have over time depended on loans as a source of revenue to power infrastructure development, salary payments, and other government obligations.

This has raised concerns over the debt servicing costs by states as experts have noted that more loans will mean the states would instead channel money meant for developments, to servicing debts.